Environmental, social and corporate governance (ESG) research and engagement firm Regnan has appointed a veteran from proxy voting specialist CGI Glass Lewis to strengthen its governance team, while also gaining two new funds manager clients.
Pru Bennett would deepen Regnan’s governance research and participate in “shaping” its engagement processes with companies, Erik Mather, managing director of Regnan, said. She will join the firm on March 2.
Meanwhile, BlackRock and Investors Mutual became clients of Regnan’s research service in December 2008, drawing on its ratings of ASX200 companies to broaden their risk analysis processes.
Mather said that Bennett, “who’s been thinking, breathing, sleeping companies for 12 years” while at CGI Glass Lewis, would improve Regnan’s analysis of corporate governance practices, and that her accounting skills could be used to quantify social and governance risks.
The move will also see Bennett shift from providing proxy voting services and engage companies about governance practices that concern Regnan
“In terms of engagement, our ‘deliverable’ is changing behaviour. You need someone firm, fair and friendly,” Mather said.
To replace Bennett, CGI Glass Lewis has appointed Lisa Fazio, formerly manager of sustainability investments at VicSuper. Beginning work on March 16 for the impending mini-proxy season, Fazio will work alongside Sandy Easterbrook, director at CGI Glass Lewis, before relocating to Sydney in July.
In a note to clients last Wednesday, Easterbrook and CGI Glass Lewis chief executive Katherine Rabin told news of Bennett’s departure and acknowledged the contribution she made to the company. Rabin wrote that Bennett also contributed to “the improvement of governance standards in Australia”.
By purchasing Regnan research, BlackRock and Investors Mutual became the third funds manager to enlist Regnan outside of founding stakeholders.
Mather said the recognition of ESG risks by super funds and investment managers was evidence of their legitimacy.
“It’s here to stay […] What’s not acceptable is managers that say ‘we don’t think it’s an issue’”.
He expected that, over time, managers would become more attuned to particular ESG risks “that make sense for different [investment] processes.” Some managers, for example, could put more emphasis on human capital than climate change, he said.
In an exclusive arrangement, Andrew Gray, head of ESG research at Goldman Sachs JBWere, calculates quantitative rankings of Regnan’s ESG ratings and distribute these to the firm’s clients.
BT Investment Management, Vanguard, Victorian Funds Management Corporation and Hermes are the founding funds management stakeholders in Regnan. In addition to BlackRock and Investors Mutual, Aviva Investors has also signed up to the firm’s research service, becoming a client in July 2008.